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Succession Management is a strategy and process for identifying, developing, and managing replacements for future leaders and critical role contributors so that successors are readily available as those positions become vacant due to promotions, transfers, terminations, or retirements. It encompasses the concepts of “Succession Planning” and “Replacement Planning”, which are part of the larger succession management scope. They are programs that aggregate the knowledge, skills, abilities (KSAs), and goals of identified candidate employees, assess those against the requirements of current and future roles, and manage employee development in preparation for key executive roles.
The goal of a succession management strategy is to successfully identify potential leaders and ultimately have them considered for those key roles as they become available. The objective is to have the individuals named as potential successors on a formalized plan become the initial candidates who interview for the identified role. The interviews may include other candidates – typically external to the company at the time of interviews - but the inclusion of those named successor candidates is judged a success whether they are offered the position or not because it reduces risks for the company and enables the individual to add to their development.
Two terms are important to understand: “Successors” and “High Potentials (HIPOs)”. Successors are candidates for top executive roles, with limited vertical movement available thereafter (typically the roles that report to the CEO or President). These are contrasted with HIPOs who are lower in the organization, and thus are considered for increasingly senior roles that culminate in a Successor status. They are employees who have the potential, ability, and aspirations for rising multiple levels in an organization, and are further differentiated from “High Performers”, who excel at their current role, but may lack the capabilities required for promotion (who are commonly known as being “topped out” in the organization). The difference is that HIPOs are high performers with the potential to eventually take on more demanding and higher-level roles.
The value of Succession Management to an organization starts with the ability to promote confidence amongst the company’s CEO and Board of Directors of the organization’s ability to prepare for executive retirements and departures. Vacancies in top positions can stall progress towards meeting strategic objectives and annual goals, create uncertainty amongst investors, and create a leadership and direction/decision-making vacuum for those reporting to the open position.
This can also maintain “tribal knowledge” of how an organization operates and succeeds by developing a pool of candidates who are led, mentored, and coached in a particular organization’s “leadership culture” (how the organization determines strategic direction, how it aligns or coordinates efforts, and how it binds the people together). While the “pros and cons” of an internal promotion vs. an external hire are many, executive promotions do have a higher success and retention rate in organizations that are successful in the marketplace.
Identifying the roles for which replacement candidates for the most senior, and thus strategically impactful are needed.
Developing success profiles to compare candidates, and then identifying candidate employees with the potential to rise to the next level (or more).
Assessing gaps in either depth or breadth of leadership replacement pools for each key role by the time a position is expected to become vacant.
Preparing learning and development actions for each successor that is specific to identified skills or capability gaps to either meet or accelerate the readiness timeframe.